Recent Posts
(Note: Page numbers referenced in posts prior to June 1, 2011 refer to 5th edition)
December 17
Are Economists Selfish?
Are people who take economics classes less generous than others?
Textbook References:
Page 30 “Who Studies Economics?”Page 220 “The Free Rider Problem”
December 12
This Year's Nobel Lectures
Thomas Sargent draws parallels between the birth of the United States and the current situation in the European Union. Chris Sims gives a history of macroeconomic modeling.
Textbook References:
Pages 22-29 “The Economist as Scientist”Page 683 “The Euro”
December 10
Steve Marglin on Heterodox Economics
Steve Marglin argues that critiques of orthodox economics should be taught much more widely.
Textbook References:
Pages 34-35 “Why Economists Disagree”December 8
Taylor versus Krugman
Paul Krugman accuses John Taylor of misrepresenting research presented at a conference on growth.
Textbook References:
Pages 34-35 “Why Economists Disagree”November 22
Polling Economic Experts
IGM Forum regularly polls economists on important policy issues. It allows us to see if a consensus exists on these issues.
Textbook References:
Pages 34-35 “Why Economists Disagree”Page 36 “Table 1: Propositions about Which Most Economists Agree”
September 12
Krugman on Barro
Paul Krugman argues that the business cycle drives investment, and not the other way around. Mankiw points out that Krugman may have made a fundamental error in logic.
Textbook References:
Pages 46-48 “Cause and Effect”September 7
Austin Goolsbee Plays...
The former chair of the President's Council of Economic Advisors participates in a very funny interview and game.
Textbook References:
Pages 31-32 “Economists in Washington”September 1
Theory versus Practice
A cartoon makes fun of economic science.
Textbook References:
Pages 22-29 “The Economist as Scientist”August 29
Alan Krueger to chair CEA
Alan Krueger has been named the new chair of the President's Council of Economic Advisors.
Textbook References:
Pages 31-32 “Economists in Washington”July 30
In Defense of Ben
Mankiw argues that Fed Chair Ben Bernanke does not deserve all the criticism he has been getting.
Textbook References:
Pages 31-32 “Economists in Washington”Pages 638-639 “Bernanke on the Fed's Toolbox”
Pages 664-665 “Inflationary Threats”
July 28
Mark Thoma vs Larry Summers
Should academic economists pay more attention to economic practitioners?
Textbook References:
Chapter 2 “Thinking Like an Economist”June 25
Crazy Public Policy: A Case Study
Ethanol subsidies drive up the cost of food and do not benefit the environment.
Textbook References:
Pages 32-34 “Why Economists' Advice Is Not Always Followed”Pages 202-209 “Public Policies toward Externalities”
June 22
Preaching to the Choir
Mankiw agrees with Paul Krugman that across-the-board cuts in tax rates will not typically increase tax revenue. But Mankiw takes issue with Krugman's evidence.
Textbook References:
Pages 34-35 “Why Economists Disagree”Pages 163-166 “Deadweight Loss and Tax Revenue as Taxes Vary”
June 18
A Few, Unwitting Agreements about Healthcare
Mankiw points out that Democrats and Republicans agree on more healthcare policies than the partisan politicians' rhetoric suggests.
Textbook References:
Pages 31-32 “Economists in Washington”June 7
Austan Goolsbee Steps Down
Austan Goolsbee will resign as the top White House economist.
Textbook References:
Pages 31-32 “Economists in Washington”May 25
A regression I would like to see
Holding SAT score constant, what effect does family income have on a student's performance in college?
Textbook References:
Pages 22-30 “The Economist as Scientist”Chapter 20 “Income Inequality and Poverty”
February 12
Jobs, Jobs, Jobs
Should the government embrace anything that creates jobs, or should it consider the long-run value of its projects?
Textbook References:
Pages 10-12 “Principle 7: Governments Can Sometimes Improve Market Outcomes”Pages 25-28 “Our Second Model: The Production Possibilities Frontier”
Page 742 “Fact 3: As Output Falls, Unemployment Rises”
Pages 787-793 “How Fiscal Policy Influences Aggregate Demand”
January 19
What would repeal of Obamacare do to the budget deficit?
Defenders of the Affordable Care Act point to a CBO study that says its repeal would add to the Federal deficit. But Holtz-Eakin, Antos, and Capretta claim that the CBO study is based on wrong assumptions.
Textbook References:
Page 23 “The Role of Assumptions”Pages 246-248 “The Fiscal Challenge Ahead”
January 12
The Half-Full Glass of Economic Mobility
How much economic mobility is there in the U.S.? There are different interpretations of the data.
Textbook References:
Pages 34-36 “Why Economists Disagree”Pages 440-441 “Economic Mobility”
January 5
What does a trillion dollars look like?
There is a clever representation of one trillion dollars.
Textbook References:
Pages 40-41 “Graphs of a Single Variable”December 19
The Charitable Deduction
Richard Thaler argues that there is little reason to allow a tax deduction for charitable giving. Mankiw disagrees.
Textbook References:
Pages 7-8 “Principle 4: People Respond to Incentives”Pages 34-36 “Why Economists Disagree”
Pages 246-248 “The Fiscal Challenge Ahead”
December 10
Fairness and Tax Policy
Jonathan Weinstein responds to a paper by Greg Mankiw and challenges some of its assumptions. The discussion centers on competing views of fair taxation.
Textbook References:
Pages 34-36 “Why Economists Disagree”
Pages 253-257 “Taxes and Equity”
Pages 419-421 “The Superstar Phenomen”
Pages 442-445 “The Political Philosophy of Redistributing Income”
December 9
Simon Johnson and Me on NPR
Simon Johnson and Greg Mankiw discuss the tax deal reached between President Obama and Congressional Republicans. Johnson fears that the deal adds too much to the tax deal. Mankiw argues that it is positive for the short run, but that the administration needs to get serious about reducing the deficit in the long run.
Textbook References:
Pages 34-36 “Why Economists Disagree”
Pages 246-248 “The Fiscal Challenge Ahead”
Pages 589-593 “Policy 3: Government Budget Deficits and Surpluses”
Pages 787-793 “How Fiscal Policy Influences Aggregate Demand”
Pages 793-797 “Using Policy To Stabilize The Economy”
Pages 842-843 “Dealing with Deficits”
November 1
From Saturday's DC Rally
A protester holds up a sign asking for policy to be based on science.
Textbook References:
Pages 22-30 “The Economist As Scientist”
October 23
Goolsbee, Deconstructed
Keith Hennessey comments on Austin's Goolsbee's assertions about recent economic policy and performance.
Textbook References:
Pages 34-36 “Why Economists Disagree”
Pages 654-655 “The Financial Crisis of 2008”
Page 750 “The 2008 Fiscal Stimulus”
October 17
Why do economists disagree?
David Segal offers some insight as to why economists sometimes disagree.
Textbook References:
Pages 34-36 “Why Economists Disagree”
September 28
Bill Clinton Channels Friedrich Hayek
Bill Clinton suggests that policy is often made by people who don't know what they are doing.
Textbook References:
Pages 32-33 “Why Economists' Advice Is Not Always Followed”
Page 358 “Galbraith versus Hayek”
September 22
Me on All Things Considered
National Public Radio interviews Greg Mankiw about life as an advisor to the President.
Textbook References:
Pages 30-33 “The Economist As Policy Adviser”
September 17
Glaeser on Goolsbee
Edward Glaeser discusses the new chair of the Council of Economic Advisers.
Textbook References:
Pages 30-33 “The Economist As Policy Adviser”
Pages 160-164 “The Deadweight Loss of Taxation”
Pages 164-167 “The Determinants Of The Deadweight Loss”
Pages 369-370 “How the Size of an Oligopoly Affects the Market Outcome”
September 10
Goolsbee to Chair CEA
The Wall Street Journal discusses the new chair of the Council of Economic Advisors.
Textbook References:
Pages 30-33 “The Economist As Policy Adviser”
September 3
Counting Small Business
Kevin Hassett and Alan Viard point out how easy it is to use statistics to mislead people.
Textbook References:
Pages 30-33 “The Economist As Policy Advisor”
August 10
The White House Policy Process
Keith Hennessey provides a detailed description of the formal groups that make up the president's economics team.
Textbook References:
Pages 30-33 “The Economist As Policy Advisor”
August 6
Christy Romer Steps Down
Christina Romer is stepping down as chair of the Council of Economic Advisors to the president.
Textbook References:
Pages 30-33 “The Economist As Policy Advisor”
July 22
Solow on DSGE Models
Robert Solow suggests that the Dynamic Stochastic General Equilibrium models that dominate modern macroeconomics do not pass the smell test.
Textbook References:
Page 23 “The Role of Assumptions”
Pages 23-24 “Economic Models”
Pages 560-572 “Economic Growth and Public Policy”
July 14
The CEA's Impossible Job
The Council of Economic Advisors to the President is charged with counting the number of jobs created by the fiscal stimulus. It's an impossible task.
Textbook References:
Pages 30-33 “The Economist as Policy Advisor”
Page 750 “The 2008 Fiscal Stimulus”
Pages 787-793 “How Fiscal Policy Influences Aggregate Demand”
Pages 793-797 “Using Policy To Stabilize The Economy”
June 26
My Latest
Mankiw discusses the difficulties faced by the President's economic team in diagnosing and treating the economic crisis. He suggests that macroeconomists need to be humble.
Textbook References:
Pages 30-33 “The Economist as Policy Advisor”
Page 750 “The 2008 Fiscal Stimulus”
Pages 787-793 “How Fiscal Policy Influences Aggregate Demand”
Pages 793-797 “Using Policy To Stabilize The Economy”
Pages 830-832 “Should Monetary And Fiscal Policymakers Try To Stabilize The Economy?”
May 13
Who Gets the Goodies?
Ted Gayer points out that the Senate will auction off less than 25 percent of pollution permits in its cap-and-trade bill. As he puts it, "the Senate bill sacrifices economic gain for political support from interest groups."
Textbook References:
Pages 32-33 “Why Economists' Advice Is Not Always Followed”
Pages 212 to 214 “Market-Based Policy 2: Tradable Pollution Permits”
May 4
A Talk from Esther Duflo
A 16 minute video shows John Bates Clark Medalist Esther Duflo discussing how the scientific method can improve the lot of the world's poorest.
Textbook References:
Pages 22-29 “The Economist as Scientist”
Pages 550-554 “Economic Growth Around the World”
April 17
The Latest from the CEA Chair
CEA Chair Christina Romer reports on what has been done to fight the current recession and discusses what else can be done.
Textbook References:
Pages 30-33 “The Economist as Policy Advisor”
Pages 246-248 “The Fiscal Challenge Ahead”
Pages 589-593 “Policy 3: Government Budget Deficits and Surpluses”
Pages 654-655 “The Financial Crisis of 2008”
Page 750 “The 2008 Fiscal Stimulus”
Chapter 34 “The Influence of Monetary and Fiscal Policy on Aggregate Demand”
Pages 830-832 “Monetary And Fiscal Policymakers Try To Stabilize The Economy”
Pages 842-843 “Dealing with Deficits”
March 21
Caveats from CBO
In a letter to Nancy Pelosi, the CBO warns that its estimate of the effect of the healthcare bill on the federal budget depends on assumptions that might not be realistic.
Textbook References:
Page 23 “The Role of Assumptions”
Pages 23-24 “Economic Models”
February 25
More on Ranking CEAs
The Economist magazine weighs in on Christina Romer's claim that her staff at the Council of Economic Advisors is the best since the 1960's.
Textbook References:
Pages 30-33 “The Economist as Policy Advisor”